By Angel Broking

The benchmark indices ended their three-day negative run to close on a positive note, following optimistic global markets. The Higher-thanexpected advance tax paid by India Inc was one of the major driving forces for the markets. The markets opened in the green, tracking firm Asian markets and the overnight US market. The markets continued to trade positively in the mid and final session, but with heightened volatility. The Sensex was up by 0.5%, while the Nifty closed higher by 0.7%. The BSE Mid- and Small-Cap indices performed relatively better than the Sensex, and increased by 0.8% and 1.0%, respectively.

Among the front liners, Tata Steel, Bharti Airtel, Hindalco, NTPC and ICICI Bank, gained between 2-4%, while ACC, ONGC, TCS, M&M, Jaiprakash Associates lost between 1-2%. In the Mid cap segment, State Trading Corp, National Fertilisers, HMT, Nava Bharat Ventures and REI Agro gained between 5.4-14.9%, while Havells, Emami, Lupin, Piramal Healthcare and Asian Star lost between 2.8-9.4%.

Markets Today

The trend deciding level for the day is 4979 / 16688. NIFTY trades above this level during the first half-an-hour of trade then we may witness a further rally up to 5004 - 5023 / 16742 – 16792 . However, if NIFTY trades below 4979 / 16688 for the first half-an-hour of trade then it may correct up to 4960 / 16638

RIL makes third discovery in KG block

RIL has announced its third successive gas discovery in a deepwater exploration block in the Krishna-Godavari basin, which the company had bagged in the fifth round of the NELP. RIL holds a 90% participating interest in the block, with Hardy Exploration and Production India holding the remaining 10% stake. The block is about 45 km off the Bay of Bengal coast and covers an area of 3,288 sq km. The discovery, named ‘Dhirubhai- 44’, has been notified to the government and the Directorate General of Hydrocarbons. The potential commerciality of the discovery is being ascertained through more data gathering and analysis. Drilling for exploration commenced on the block in 2008. In February 2008, RIL made its first gas discovery in the same block and the discovery was named ‘Dhirubhai–39’. In April 2008, the company made its second discovery in the block. RIL is likely to drill three additional exploration wells in the block before the end of 2010. The discovery supplements RIL’s understanding of the petroleum system within the block. 3D seismic (data) has been acquired over the entire block area. Besides the above discoveries, several prospects have been mapped at different stratigraphic levels to fulfill the balance minimum work commitment of three wells. While the quantum of the discovery is not known, it will add to RIL’s income, as the company has struck gas for the third time in the block. We maintain a Buy on RIL, with a target price of Rs1,170.

Lupin settles litigations with Forest Labs for Namenda

Lupin announced that it has settled all patent litigations relating to its US launch of generic version of Memantine tablets. Forest Labs sells the drug, used to treat Alzheimer’s Syndrome, under the brand name Namenda. Namenda tablets generated sales of US $949mn in CY2008. As per the terms of the settlement, Lupin will be licensed to commercially launch its version in January 2015, or even earlier, under special circumstances. Lupin did not disclose the settlement amount. Moreover, Forest has already entered into settlement agreements with Amneal, Cobalt, Sun Pharma, Teva, Upsher-Smith, Wockhardt and Apotex for the launch of the generic version of Namenda. As a result, the settlement is unlikely to have any material financial impact for Lupin. The stock is currently trading at 16.8x FY2011E and 14.0x FY2012E Earnings. We recommend a Buy, with a 15-month Target Price of Rs1,863.

Economic and Political News
- Petroleum Ministry urges Prime Minister to issue Rs20,870cr oil bonds
- Railways to award first set of contracts for Multi-Functional Complexes by Feb.
- Centre plans new Shipyard on East Coast for Defence
- India–ADB signs US $850mn loan agreement

Corporate News
- Jindal Saw bags order worth Rs1,100cr
- NALCO hikes Aluminium prices by Rs3,500 per tonne
- Aban Offshore repays bonds worth Rs800cr
- ONGC agrees to pay Special Oil Tax